Aggregated News From Investment Management Regulators

SEC Charges Broker Who Defrauded Seniors Out of Almost $1 Million

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The U.S. Securities and Exchange Commission today announced charges against a Nashville, Tennessee-based securities broker for defrauding two seniors, including a World War II-era veteran, of nearly $1 million.

According to the complaint, Frederick Stow acted as the veteran’s registered representative for more than three decades and inserted himself over time into the veteran’s personal and financial affairs. The complaint alleges that in October 2015, Stow began making unauthorized sales of securities from the veteran’s individual retirement account. Stow allegedly transferred the proceeds of those sales to his own bank account on 74 occasions using falsified wire transfer forms. The complaint further alleges that approximately one month after the veteran’s death in March 2019 at the age of 98, Stow stole money from another senior by wiring money from the senior’s brokerage account to Stow’s own bank account without authorization. In total, Stow stole $933,500 from the seniors.

“Far too often, veterans and seniors who depend on their investments for retirement income are targeted by fraudulent schemes,” said Justin Jeffries, Associate Regional Director for the SEC’s Atlanta Regional Office. “As alleged in our complaint, Stow took advantage of these seniors, abusing his access to their brokerage accounts to generate income for himself.”

The SEC has charged Stow in the U.S. District Court for the Middle District of Tennessee with violations of the antifraud provisions of the federal securities laws. The SEC is seeking injunctive relief, the return of allegedly ill-gotten gains plus prejudgment interest, and a civil penalty. In a parallel action, the U.S. Attorney’s Office for the Middle District of Tennessee filed criminal charges against Stow.

Investors can find additional information about how to protect their investments at Investor.gov. The Office of Investor Education and Advocacy and Division of Enforcement’s Retail Strategy Task Force encourage active and retired military and senior investors to learn more at the military and senior investor education webpages on Investor.gov and report any suspicious investment-related activity or schemes using the SEC’s online tips, complaints, and referrals (TCR) system.

The SEC’s investigation was conducted by John Westrick of the Atlanta Regional Office and supervised by Matthew McNamara. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Middle District of Tennessee, the Nashville Field Office of the U.S. Secret Service, and the Financial Industry Regulatory Authority.

Regulator Information

Abbreviation: SEC
Jurisdiction: United States

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